The second institution that’s trying to kill crypto is the FATF or financial action task force. Now you must be thinking how FATF is trying to kill crypto? It’s an international organization based in Paris France. It consists of 40 countries and dozens of other international organizations including the IMF and world bank. The FATF was founded in 1989 and it was initially established to combat money laundering around the world. Its mandate has since expanded to include anything that threatens the integrity of the financial system. It achieves this mandate by issuing so-called recommendations about the kinds of financial regulations the countries should implement.
The FATF drafted its first set of 40 recommendations one year after it was founded. The most infamous of these recommendations is the so-called travel rule. Which requires financial institutions to collect detailed information about anyone sending or receiving more than a certain amount of money usually around one thousand dollars. Although the FATF doesn’t have the power to write national laws any countries that fail to comply with its recommendations often find themselves on its graylist or worse its blacklist.
How FATF is trying to kill crypto? Being on the former makes it difficult to interact with the global financial system and being on the latter makes it impossible. That’s why more than 200 countries have chosen to comply with the FATF’s recommendations. Now if you’re wondering who writes the FATF’s recommendations the answer is nobody really knows.
That’s because the FATF consists of unelected officials who hold meetings behind closed doors where they decide what recommendations to pass and which countries land on which list. if you read our first article about the FATF then you’ll know that its officials are also effectively above the law. Thanks to the Vienna conference on diplomatic intercourse and immunities passed in 1961. Under the Vienna conference folks like FATF officials cannot be arrested or detained they cannot be charged with a criminal or civil crime and they do not have to pay taxes. FATF officials are also not subject to pandemic travel restrictions. Now while it’s not exactly clear who decides what the FATF does it’s clear that it has strong connections to the united states. Specifically the united states department of the treasury.
Two of the three lead authors of the finalized recommendations for cryptocurrency were from the treasury department. The document notes that the united states are the primary driver behind compliance with the FATF’s recommendations. This would explain why the FATF’s travel rule is eerily similar to the united states bank secrecy act. Which was passed way back in the 1970s and is coincidentally also referred to as the travel rule. It would also explain why the united states aren’t on the FATF’s gray list or blacklist. Even though up to 40 percent of all money laundering happens in the USA and why the countries that do end up on the FATF’s gray blacklist tend to be at odds with the interests of the united states.
Given these facts, it looks like the fat f is another financial weapon the united states occasionally uses against its enemies and it’s a weapon that’s being used against cryptocurrency as well. Believe it or not but the FATF doesn’t actually want to ban cryptocurrency. It just wants no more peer-to-peer transactions and no more privacy. Something it hopes to achieve by labeling any technology or activity related to these two as high risk. In other words, the FATF wants to turn crypto into another arm of the existing financial system which is of course controlled by the united states.
This is pretty bad but admittedly not as bad as what the bis are planning. It also doesn’t seem to be working if you read our most recent article about the FATF you’ll know that countries are taking their sweet time complying with its crypto recommendations. It looks like there are a few which might not impose the crypto regulations the FATF wants to see. This might have something to do with the fact that its recommendations don’t work in combating illicit finance. The FATF’s own statistics suggest it hasn’t made a dent in dark money in over 30 years.
Related: How Bis is trying to Kill Crypto?
Now if this non-compliance by countries continues it will be difficult for the FATF to achieve its goal in time. Because if crypto adoption reaches a tipping point it will be impossible for politicians to pass the crypto regulations the FATF wants to see. Because the people will vote against such politicians. It’s also quite possible that by the time compliance starts to come the financial system would have fragmented to such an extent that the FATF no longer has any influence. This fragmentation has been accelerated by the unprecedented sanctions against Russia.